Pakistan Daily Economy Update - 31 July

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1. Jul . 30 - 31, 2017 KCCI - eBulletin 46 Special Economic Zones being setup under CPEC The officials of Board of Investment (BoI), in a press conference, have informed that the board in coordination with provincial governments is working for establishment of Special Economic Zones (SEZs) in the country. In this regard, 46 sites have been identified for establishing these zones to leverage various routes of CPEC. Out of these, nine sites have been declared as Priority Zones under CEPC. The Nation - Mon. 20 business groups get 30% of total bank loans A research report by SBP has said that 30% of banks’ exposure is to only 20 business groups. Growth in credit depends heavily on the appetite of the corporate sector, which currently receives nearly 70% of total bank lending, according to report issued by SBP. Report further highlighted that the overall credit growth in Pakistan has remained subdued as a number of big, cash-rich conglomerates have increasingly begun using their own resources to fund growth rather than borrowing from commercial banks. Dawn-Sun. Avoidance of dual taxation: Pakistan-Belarus protocol takes effect from Jun. 7, 2017 FBR has issued S.R.O. 709(1)/2017 to amend the existing Convention for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to taxes on income between Pakistan and Belarus signed on July 23, 2004. The said Protocol has come into force from Jun. 7, 2017. Under the article of Shipping and Air Transport, the profits from the operation of aircraft in international traffic shall be taxable only in the Contracting State in which the place of effective management of the enterprise is situated. BR - Sun. Money Market: Bank borrowing increases by 2.55% The government raised PKR 54.47Bn from the auction of PIB’s of various tenors, smaller against the received bids of PKR 75.64Bn. It generated PKR 23.1Bn from 10 year PIBs at a cut off yield of 7.936%, followed by 3 year PIBs PKR 20.86Bn, at 6.40% and PKR 10.45Bn from 5 year bonds at 6.89%. Dawn-Mon. Sindh performance on PKR 8.9Bn project remains below par A mid-term review of PKR 8.9Bn Sindh Agricultural Growth Project (SAGP) is scheduled for Sep‘17 to assess the progress of its two main components, i.e. agriculture and livestock. However, progress on the agriculture component remains below par due to the government’s mishandling of the plan, and those connected with the project believe that agriculture funds or part of them may be diverted to the livestock component where progress has been better so far. The World Bank-funded project, launched in 2014, focuses on promoting good agricultural practices and controlling pre- and post-harvest losses, and is a vital project for chilli, dates, onion, rice and livestock. Dawn-Mon. PKR 12.2 per unit upfront tariff set for RFO-fired CPPs Nepra has fixed upfront tariff of PKR 12.2/unit for RFO-fired Captive Power Plants (CPPs) to be delivered to power purchaser on take and pay basis applicable till Dec. 31, 2018. Under this tariff, PKR 10.39 will be reference fuel cost component while PKR 1.8581 per unit will be fixed cost component. The purpose of upfront tariff fixations is aimed at short-term utilization of available generation capacity. BR - Sun. \ Intermediaries: SECP unveils registration rules To facilitate corporate sector in filing of documents, the SECP has issued SRO 705(I)/2017 for Intermediaries (Registration) Regulations, 2017 through which authorized individuals, firms, limited liability partnerships and companies can obtain registration as an intermediary for providing services in terms of section 455 of the Act. This is subject to the condition that if the applicant in case of an individual is holding valid practice certificate from ICAP/ICMAP/CPA/ACCA/CMA, LLB degree, MBA (Finance), M.Com and M.Law with at least two years of experience. BR - Sun. Fertiliser subsidy process simplified The government has simplified the process for disbursing pending payments to fertiliser manufacturers under the subsidy schemes of FY16 and FY17. It has been decided that the Ministry of National Food Security and Research (MNFS&R) would release all the pending payments expeditiously in accordance with originally notified mechanism through the SBP avoiding any verification processes. The secretary finance was directed to issue the new notification to ensure timely disbursement of subsidy claims in future. Dawn-Sun. Fisheries exports contribute $ 276Mn to national kitty Pakistan has exported around 103,277 tons of fish and fish preparations during 9MFY17 which contributed $ 276.27Mn precious foreign exchange to national exchequer as against exports of 92,046 tons, amounting to $ 240.04Mn in the 9MFY16. The exports of fish and fish preparations have witnessed an increase by 12.2% in quantity and 15.09% during the period under review. The major buyers of Pakistani fish and fish preparations are China, Thailand, Malaysia, Middle East, Sri Lanka, Japan etc. During period under review, total marine and inland fish production was estimated at 520,000 tons out of which 375,000 tons were marine production and remaining catch came from inland waters. The Nation - Mon. IDB seeks proposals for dollar Sukuk Saudi Arabia's Islamic Development Bank (IDB) has asked banks for proposals to arrange a US dollar-denominated sukuk. The new sukuk, which is likely to have a five-year maturity, could be issued in Sept.’17 or Oct.’17. The request did not indicate a specific size for the deal, but it is expected to range from $ 1Bn to $ 1.5Bn. BR - Mon. List of Indicators Date / Period Unit Value Change Daily Crude (AU'17) Gold (JY'17) Gold (10g) Local Silver (JY'17) Cotton(KHI)-40 kg Kibor-6M 28-Jul 28-Jul 28-Jul 28-Jul 28-Jul 28-Jul 28-Jul 28-Jul 28-Jul 28-Jul PKR PKR Pts. $ Mn $/bbl $/oz PKR $/oz PKR % 105.40 107.35 45,912 -13.45 48.90 1,270.9 43,885 16.73 6,805 6.14% Forex Reserves 21-Jul $ Bn 20.40 0.01% -0.05% 0.01% NM** -0.49% 0.87% 0.19% 1.03% 0.78% 0.00% WoW -2.06% YoY -3.08% -1.63% 18.67% -36.32% -148.57% 4.58% USD-Interbank USD-Open MKT KSE-100 index FIPI Jul-Jun 17 Remittances $ Bn 19.30 Jul-Jun 17 Exports* $ Bn 20.45 Jul-Jun 17 Imports* $ Bn 53.03 Jul-Jun 17 Trade Balance* $ Bn -32.58 Jul-Jun 17 Current Account $ Mn -12,098 Foreign Direct Inv. $ Bn 2.41 Jul-Jun 17 Jul-May 17 LSM Growth* % 5.69 % 4.16 Jul-Jun 17 Avg. CPI-FY17* Discount Rate % 5.75 Jul-17 WoW= week Sources: KCCI Research, PMEX , NCCPL, KSE, SBP, PBS* ** Not Meaningful on week; Major Currencies 145 GBP, 30-Jul-17, 137.9 135 125 EUR, 30-Jul-17, 123.4 115 105 95 Jul-16 USD, 30-Jul-17, 105.0 USD Oct-16 GBP EUR Jan-17 Apr-17 Source: KCCI Research ; Oanda.com Quote of the Day “Be not afraid of life. Believe that life is worth living, and your belief will help create the fact." William James Chart of the Day 180 Large Scale Manufacturing Index & its Growth Trajectory (May.'13 - May.'17) 14% 170 12% 160 10% 8% 150 6% 140 4% 130 2% 120 0% 110 -2% 100 -4% May/13 Jun/13 Jul/13 Aug/13 Sep/13 Oct/13 Nov/13 Dec/13 Jan/14 Feb/14 Mar/14 Apr/14 May/14 Jun/14 Jul/14 Aug/14 Sep/14 Oct/14 Nov/14 Dec/14 Jan/15 Feb/15 Mar/15 Apr/15 May/15 Jun/15 Jul/15 Aug/15 Sep/15 Oct/15 Nov/15 Dec/15 Jan/16 Feb/16 Mar/16 Apr/16 May/16 Jun/16 Jul/16 Aug/16 Sep/16 Oct/16 Nov/16 Dec/16 Jan/17 Feb/17 Mar/17 Apr/17 May/17 Committees formed to resolve oil transportation issue, review Ogra regulations The government has constituted a number of committees for fast-track resolution of issues relating to transportation of petroleum products and suggesting amendments to safety regulations of the oil sector regulator. Committee headed by Ogra Chairperson had been constituted to “review various clauses of Ogra regulations 2009”. This report will clearly spell out as to which of the rules can be implemented immediately, which require time to fulfil and which rules need to be amended. Dawn-Mon. Economic Indicators LSM Index (LHS) Y-o-Y Growth (RHS) Source: KCCI Research, PBS Disclaimer This report has been prepared by KCCI Research & Development Cell. The information contained herein have been compiled or arrived at based upon information obtained from sources believed to be reliable and in good faith. Such information has not been independently verified. icon represents the sole viewpoint of the KCCI R&D Cell, and is stated to enrich the readers' understanding of the news item. The R&D Dept. bears no responsibility for its correctness or accuracy. Contact: res@kcci.com.pk